REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos. 1237­1238 OF 2019
(Arising out of S.L.P.(C) Nos.28420­28421 of 2017)

Dr. H.K. Sharma     ….Appellant(s)

VERSUS

Shri Ram Lal       ….Respondent(s)

                 
J U D G M E N T

Abhay Manohar Sapre, J.

1. Leave granted.

2. These   appeals   are   directed   against   the   final

judgment   and   orders   dated   03.10.2017   in   Recall

Application No.871 of 2017 in W.P.(MS) No.396 of

2016 and dated 17.07.2017 in W.P.(MS) No.396 of

2016 passed by the High Court of Uttarakhand at
Signature Not Verified

Digitally signed by
ANITA MALHOTRA
Date: 2019.01.28
17:20:17 IST
Nainital. 
Reason:

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3. In   order   to   appreciate   the   short   controversy

involved   in   these   appeals,   few   relevant   facts   need

mention infra.

4. The appellant is the “opposite party” whereas

the   respondent   is   the   “applicant”   in   the   original

application out of which these appeals arise.

5. The   respondent   (applicant)   is   the   owner   of

house   bearing   No.5A,   Court   Road,   Nardev   Shastri

Road,   Dehradun   comprising   of   four   rooms,   one

kitchen,   two   verandahs   and   two   galleries.     The

respondent   has   let   out   a   portion   of   this   house

consisting   of   three   rooms,   one   kitchen,   latrine­

bathroom, one store and two verandas (hereinafter

referred to as the “suit house”) to the appellant on a

monthly   rent   of   Rs.750/­   as   per   the   tenancy

agreement   dated   22.07.1985   entered   into   between

them. 

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6. On   28.04.2008,   the   respondent   filed   an

application under Section 21(1) (a) of the U.P. Urban

Buildings (Regulation of Letting Rent and Eviction)

Act,   1972   (hereinafter  referred  to as  “the  UP Act”)

against   the   appellant   (opposite   party)   before   the

Prescribed   Authority   (Civil   Judge)   Sr.   Division,

Dehradun seeking his eviction from the suit house. 

7. The   eviction   was   sought   on   the   ground   of

respondent's  bona   fide  need  for   his  residence  and

also   the   members   of   his   family.   The   respondent

alleged   that   he   has   retired   from   the   services   and

has   no   other   suitable   house   of   his   own   where   he

can live and,  therefore,  requires the suit house for

his personal residence as also for the residence of

the members of his family. 

8. The   appellant   (opposite   party)   contested   the

application   by   filing   the   written   statement.   While

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denying   the   ground   of  bona   fide  need,   it   was

contended   that   the   appellant   has   entered   into   an

agreement   on   13.05.1993   with   the   respondent   for

purchase of the suit house and pursuant thereto he

has   also   paid   huge   amount   to   the   respondent.   It

was contended that since the parties have already

entered into an agreement of sale/purchase of the

suit   house,   the   relationship   of   landlord/tenant

between   them   has   ceased   to   exist   and   now   it   no

longer subsists and has come to an end. 

9. It   was   also   contended   that   consequent   upon

the execution of the agreement between the parties

for the purchase of the suit house, the appellant is

no longer in possession of the suit house as tenant

but is now in possession as a purchaser of the suit

house in part performance of the agreement dated

13.05.1993 qua the respondent. 

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10. In   other   words,   it   was   contended   that   the

relationship   of   landlord   and   tenant   between   the

parties has come to an end and now the same stood

converted   into   the   new   relationship   of   buyer   and

seller   of   the   suit   house.     It   was,   therefore,

contended   that   the   application   filed   by   the

respondent   under   Section   21(1)   (a)   of   the   UP   Act

against the appellant for his eviction from the suit

house is not maintainable and, therefore, it is liable

to be dismissed on this short ground.

11. The   Prescribed   Authority   by   order   dated

03.11.2010 dismissed the respondent's application

and   held   that   since   the   parties   entered   into   an

agreement   dated   13.05.1993   for   sale   of   the   suit

house,   the   appellant   was   not   required   to   pay   any

monthly   rent   to   the   respondent   inasmuch   as

according   to   him   the   relationship   of   the   landlord

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and tenant between the parties has come to an end.

He also decided the issue of bona fide need against

the respondent and in appellant's favour.

12. The   respondent   felt   aggrieved   and   filed   an

appeal   before   the   Appellate  Court.  By   order   dated

19.12.2015,   the   Appellate   Court   dismissed   the

appeal   and   affirmed   the   order   of   the   Prescribed

Authority. The respondent (applicant) felt aggrieved

and filed the writ petition under Article 227 of the

Constitution   of   India   before   the   High   Court   of

Uttarakhand at Nainital. 

13. By   impugned   order   dated   17.07.2017,   the

High Court allowed the writ petition and set aside

the order of the Appellate Court and the Prescribed

Authority.   The   appellant   felt   aggrieved   and   filed

recall   application.   The   High   Court   by   order   dated

03.10.2017 dismissed the recall application. 

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14. The   High   Court held  that  mere agreement to

sell the suit house would not result in termination

of landlord­tenant relationship between the parties

unless there is a stipulation in the agreement itself

to   that   effect.   It   was   also   held   that   since   the

agreement   in   question   relied   on   by   the   appellant

(opposite party) is not a registered agreement, he is

not   entitled   to   raise   the   plea   of   part   performance

based   on  Section  53­A of the Transfer  of Property

Act,   1882   (for   short   “the   TP   Act”)   against   the

respondent.   The   High   Court   further   held   that   the

respondent being an old man has every right to live

in his house in the last leg of his life and more so

when he has no other house of his own in the city

and, therefore, he has made out a case of bona fide

need   for   his  residence as also for the members of

his family.

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15. It is against these two orders of the High Court,

the   opposite   party,   i.e.,   the   tenant   has   filed   these

appeals by way of special leave in this Court.

16. So,   the   short   question,   which   arises   for

consideration   in   these   appeals,   is   whether   the   High

Court   was   justified   in   allowing   the   respondent's

application filed under Section 21(1) (a) of the UP Act. 

16A. Heard   Mr.   Jitendra   Mohan   Sharma,   learned

senior   counsel   for   the   appellant   and   Mr.   Narender

Hooda, learned senior counsel for the respondent.

17. Mr. Jitendra Sharma, learned senior counsel for

the   appellant   while   assailing   the   legality   and

correctness   of   the   impugned   order   has   essentially

argued one point. 

18. Placing   reliance   on   the   decision   reported   in  R.

Kanthimathi   &   Anr.  vs.  Beatrice   Xavier   (Mrs.)

[(2000) 9 SCC 339],   learned counsel contended that

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the High Court erred in allowing the application filed

by the respondent against the appellant. 

19. It was his submission that the issue raised by

him in support of his submission remains no longer

res   integra  and   stands   decided   by   the   decision

rendered in the case of  R. Kanthimathi  (supra) in

appellant's favour. 

20. Learned counsel elaborated his submission by

contending   that  the  moment  the  landlord and  the

tenant enters into an agreement of sale/purchase of

the   tenanted   property   while   subsistence   of   the

tenancy and the tenant pursuant to such agreement

pays part consideration to the landlord towards sale

price  of the  tenanted premises, the relationship of

landlord and tenant comes to an end and ceases to

exist,   i.e.,   it   results   in   termination   of   the   tenancy

agreement  ipso   facto  and   in   its   place   brings   into

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existence   a   new   relationship   between   the   parties,

namely, that of the purchaser and the seller of the

tenanted premises. 

21. It was his submission that it is for this reason,

the application filed by the respondent as landlord

of   the   tenanted   premises   to   seek   the   appellant's

eviction   as   his   tenant   from   the   suit   house   was

wholly misconceived and not maintainable for want

of   any   subsisting   relationship   of   landlord­tenant

between   them.   It   was,   therefore,   rightly   dismissed

by   the   Prescribed   Authority   and   the   Appellate

Authority but wrongly allowed by the High Court by

the impugned order.

22. In   reply,   learned   counsel   for   the   respondent

(applicant­landlord) supported the  impugned order

and contended that no case is made to interfere in

the impugned order.

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23. Having   heard   the   learned   counsel   for   the

parties and on perusal of the record of the case, we

find no merit in these appeals.

24. The question, which arises for consideration in

these   appeals,   is   when   the   lessor   and   the   lessee

enters  into  an  agreement for sale/purchase of the

tenanted   premises   where   the   lessor   agrees   to   sell

the   tenanted   premises   to   his   lessee   for

consideration  on  certain conditions, whether, as a

result   of   entering   into   such   agreement,   the   Jural

relationship   of   lessor  and  the lessee in relation  to

the   leased   property   comes   to   an   end   and,   if   so,

whether it results in determination of the lease.

25. In   other   words,   the   question   that   arises   for

consideration   is   when   the   lessor   enters   into   an

agreement to sell the tenanted property to his lessee

during   the   subsistence   of   the   lease,   whether

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execution of such agreement would ipso facto result

in   determination   of   the   lease   and   severe   the

relationship   of   lessor  and  the lessee in relation  to

the leased property.

26. In our considered opinion, the aforementioned

question   has   to   be   decided   keeping   in   view   the

provisions   of   Section   111   of   the   TP   Act   and   the

intention of  the  parties to the lease ­ whether the

parties intended to surrender the lease on execution

of   such   agreement   in   relation   to   the   tenanted

premises   or   they   intended   to   keep   the   lease

subsisting   notwithstanding   the   execution   of   such

agreement.  

27. Chapter V of the TP Act deals with the leases

of   Immovable   property.   This   chapter   consists   of

Section 105 to Section 117. 

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28. A   lease   of   an   immoveable   property   is   a

contract   between   the   lessor   and   the   lessee.   Their

rights   are governed by Sections 105 to 117 of TP

Act   read   with   the   respective   State   Rent   Laws

enacted by the State. 

29. Section   111   of   the   TP   Act   deals   with   the

determination of lease. Clauses (a) to (h) set out the

grounds   on   which   a   lease   of   an   immoveable

property can be determined. 

30. Clauses   (e)   and   (f)   with   which   we   are

concerned   here   provide   that   a   lease   can   be

determined   by   an   express   surrender;   in   case,   the

lessee yields up his interest under the lease to the

lessor by mutual agreement between them whereas

Clause (f) provides that the lease can be determined

by implied surrender.

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31. This Court in the case of   Shah Mathuradas

Maganlal & Co. vs. Nagappa Shankarappa Malage

& Ors.,  (1976) 3 SCC 660  considered the scope of

clauses (e) and (f) of Section 111 of the TP Act and

laid   down   the   following   principle   in   Para   19     as

under.

“19. A   surrender   under   clauses   (e)   and   (f)

of section   111 of   the   Transfer   of   Property
Act,   is   an   yielding   up   of   the   term   of   the
lessee's   interest   to   him   who   has   the
immediate   reversion   or   the   lessor's interest.
It   takes   effect   like   a   contract   by   mutual
consent on the lessor's acceptance of the act
of   the   lessee.   The   lessee   cannot,   therefore,
surrender  unless  the  term  is vested  in  him;
and   the   surrender   must   be   to   a   person   in
whom the immediate reversion expectant on
the   term   is   vested.   Implied   surrender   by
operation of law occurs by the creation of a
new   relationship,   or   by   relinquishment   of
possession. It the lessee accepts a new lease
that   in   itself   is   a   surrender.   Surrender   can
also   be   implied   from   the   consent   of   the
parties   or   from   such   facts   as   the
relinquishment   of   possession   by   the   lessee
and   taking   over   possession   by   the   lessor.
Relinquishment of possession operates as an
implied surrender. There must be a taking of
possession, not necessarily a physical taking,

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 but something amounting to a virtual taking
of possession. Whether this has occurred is a
question of fact. 

 32. It   is   in   the   light   of   the   aforementioned   legal

principle, the question involved in this case has to

be examined.

33. Perusal of Agreement to Sell dated 13.05.1993

(Annexure   P­1)   shows   that   though   the   agreement

contains   9   conditions   but   none   of   the   conditions

provides much less in specific terms as to what will

be the fate of the tenancy. In other words, none of

the conditions set out in the agreement 13.05.1993

can   be   construed   for   holding   that   the   parties

intended to surrender the tenancy rights. 

34. A  fortiori,  the   parties   did   not   intend   to

surrender   the   tenancy   rights   despite   entering   into

an agreement of sale of the tenanted property.   In

other   words,   if   the   parties   really   intended   to

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surrender   their   tenancy   rights   as   contemplated   in

clauses (e) or (f) of Section 111 of the TP Act while

entering into an agreement to sell the suit house, it

would have made necessary provision to that effect

by providing   a specific clause in the agreement. It

was, however, not done. On the other hand,  we find

that the conditions set out in the agreement do not

make out a case of express surrender under clause

(e) or implied surrender under clause (f) of Section

111 of the TP Act.   

35. It is for this reason, the law laid down by this

Court in the case of R. Kanthimathi (supra) has no

application to the facts of this case and is, therefore,

distinguishable on facts. Indeed, it will be clear from

mere perusal of para 4 of the said decision quoted

hereinbelow:

  “4.   As   aforesaid,   the   question   for

consideration is, whether the status of tenant

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 as   such   changes   on   the   execution   of   an
agreement   of   sale   with   the   landlord.   It   is
relevant at this junction first to examine the
terms of the agreement of sale. The relevant
portions of the agreement of sale records the
following:

“I   the   aforesaid   Mrs.   Beatrice   Xavier

hereby   agree   out   my   own   free   will,   to   sell,
convey and transfer the property to you Mrs.
R.   Kanthimathi   wife   of   Mr.   S.   Ramaswami,
435 Trichy Road, Coimbatore for a mutually
agreed sale consideration of Rs.25,000/­.

I shall be proceeding to Coimbatore and
shall  execute   the   sale   deed   and   present  the
same   for   admission   and   registration   before
the   Registering   Authority,   accepting   and
acknowledge   payment   of   the   balance   of
consideration   of   Rs.   5000/­   (Rupees   five
thousand   only)   at   the   time   of   registration
and   shall   complete   the   transaction   of   sale
and conveyance as the property demised has
already   been   surrendered   to   your
possession.”           (Emphasis in Original)

36. The   words   highlighted   in   italics   of   the

agreement   were   construed   by   Their   Lordships   for

holding that these italicized words in the agreement

clearly indicate that the parties had really intended

to surrender their tenancy rights on execution of the

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agreement   of   sale   and   bring  to   an   end   their   jural

relationship of  the landlord and tenant.

37. As observed supra, such is not the case here

because we do not find any such clause or a clause

akin thereto in the agreement dated 13.05.1993 and

nor   we   find   that   the   existing   conditions   in   the

agreement   discern   the   intention   of   the   parties   to

surrender the tenancy agreement either expressly or

impliedly. 

38. In the light of the foregoing discussion, we are

of   the   considered   opinion   that   the   tenancy   in

question   between   the   parties   did   not   result   in   its

determination   as   contemplated   under   Section   111

of TP Act due to execution of the agreement dated

13.05.1993 between the parties for sale of the suit

house   and   the   same   remained   unaffected

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notwithstanding   execution   of   the   agreement   dated

13.05.1993 

39. A fortiori,    the respondent (lessor) was rightly

held   entitled   to   file   an   application   against   the

appellant (lessee) under Section 21 (1) (a) of the UP

Act and seek the appellant's eviction from the suit

house after determining the tenancy in question.

40. Before   parting,   we   make   it   clear   that   we

examined   the   terms   of   the   agreement   dated

13.05.1993   only   for   deciding   the   question   as   to

whether the execution of agreement, in any manner,

resulted   in   determination   of   the   existing   tenancy

rights   between   the   parties   in   relation   to   the   suit

house in the context of the TP Act and the UP Act

and not beyond it.

41. Coming to the next question as to whether the

respondent   has   made   out   a   case   of   his  bona   fide

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need   for   his   residence   and   the   members   of   his

family as contemplated under the UP Act, suffice it

to   say,   it   being   a   question   of   fact,   the   finding

recorded  by  the   High Court on this question does

not   call   for   any   interference   in   this   appeal.     It   is

binding on this Court.   Even otherwise, we find no

good   ground   to   interfere   in   the   finding   for   the

reason that the respondent being a landlord and a

retired man has every right to live in his house with

his family.   Therefore, there is no perversity in the

finding of the High Court on this issue.

42. In   the   light   of   the   foregoing   discussion,   we

concur   with   the   reasoning   and   the   conclusion

arrived at by the High Court in the impugned order.

It does not call for any interference.

43. The   appeals   thus   fail   and   are   accordingly

dismissed. 

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44. The   appellant   is,   however,   granted   three

months’ time to vacate the suit house subject to the

appellant   furnishing   usual   undertaking   in   this

Court within two weeks from the date of this order

and   paying   entire   arrears   of   rent   upto   date

including three months rent to be paid in advance

to   the   respondent   to   enable   him   to   remain   in

possession   for   a   period   of   three   months   from   the

date of this order.  The arrears of rent,  as directed,

be paid by the  appellant to the respondent within

one month from the date of this order.  

        ………...................................J.
[ABHAY MANOHAR SAPRE]
                         
                                                
....……..................................J.
        [DINESH MAHESHWARI]

New Delhi;
January 28, 2019.

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